Monte Carlo SBM is hoping to extend its casino business into the virtual world of online gambling by taking a 50% stake in Mangas Capital Gaming (MCG). The Monegasque company, whose image is synonymous with the luxury and glamour of Monte Carlo, has been eager to start developing its brand on the Internet. However, this has proved difficult, primarily because of French gaming regulations.
Gambling in France is a state owned monopoly, with lotteries controlled by the Francaise des Jeux, and betting on horse racing controlled by the PMU. However, the European Union principle of free movement of goods and services between member nations is making things difficult for France. The French state is finding it hard to retain control of the industry, especially with the increase in cross-border gambling that's become possible on the Internet. Just what will happen to European monopolies is still under discussion, with France hoping to persuade other countries to accept some sort of European wide regulation, and countries such as the UK and Malta insisting that regulation remains at the national level.
SBM has decided it can no longer wait for the various governments to sort things out, and so they've taken the stake in MCG. The objective of the 50/50 deal with Financiere Lov is to get their brand established in cyberspace, where MCG already has a presence. It bought the UK company BetClick Ltd earlier this year, and hopes to make further acquisitions of online gaming companies with the capital that the SBM and Financiere Lov will generate. Clearly, it's a risk worth taking.